ABSTRACT
It is inevitable that the many contractual relationships between seller and buyer, seller and issuing bank, buyer and issuing bank, and seller and shipowner that arise in the course of an international sales transaction will become sources of dispute. At some stage, the parties need to decide on the means of resolving the dispute. Should they go to the courts – the mechanism provided by the state – to settle the issue? Or should they look to other methods, such as arbitration or conciliation? The decision is one to be made in the light of the advantages and disadvantages of the different methods, their suitability for the particular business relationship, and the legal, economic and commercial backgrounds of the parties to the dispute. Litigation operating around well-settled legal rules and principles, procedural rules, and the abundance of precedents is the obvious choice. Acrimony created during the course of litigation, however, may not suit parties intending to consolidate or maintain a longterm commercial relationship. In an international commercial context, uncertainties about procedural rules and substantive laws of different states may also make it unattractive.
